“U.S. stocks slid on Wednesday and the Dow suffered its worst drop of 2010 due to fears that China’s curbs on bank lending might jeopardize the global economic recovery, while IBM’s outlook sparked caution about the technology sector,” Ellis Mnyandu reports for Reuters.
“Chinese authorities have ordered some major banks to curb their lending over the rest of this month after an early burst of credit, banking industry sources said,” Mnyandu reports. “Although IBM posted a stronger-than-expected quarterly profit late on Tuesday, investors had misgivings about its guarded 2010 outlook, sending the stock down nearly 3 percent.”
“The Dow suffered its largest daily percentage decline since late December, while the Nasdaq took its largest daily percentage loss in a week. It was the worst drop for the S&P 500 since Friday,” Mnyandu reports. “On Tuesday, the Dow and the S&P 500 ended at 15-month highs on bets the Democrats would lose a Senate seat.”
Mnyandu reports, “Earlier on Wednesday, the major indexes had dropped about 2 percent or more, but recovered some ground in the last hour of the session, thanks to some buying of bank stocks… IBM was the Dow’s biggest drag… On the Nasdaq, Apple Inc. was the heaviest weight, down 1.5 percent at $211.725. Other tech bellwethers off 1 percent or more were Google, Microsoft and Cisco.”
“Investors have counted on emerging economies like China to underpin a nascent global recovery, so any restrictive policy there could be a setback for investors whose bets on a sustainable rebound recently propelled the S&P 500 to 15-month highs,” Mnyandu reports. “Healthcare stocks, which led an advance on Tuesday on signs that a healthcare overhaul could face new hurdles in Congress, declined on Wednesday as some investors booked profits.”
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